BJP-ruled states oppose Centre''s GST proposals again

Delhi Finance Minister A K Walia also supported the Centre''s proposals and said that some states are opposing iton their party line.

Raghavji said there should not be state financeministers'' meeting on GST, unless there is consensus betweenthe Centre and the states on the issue.

Last year, a draft constitution bill proposed by theCentre to states had suggested a council chaired by UnionFinance Minister, with states as members to make changes inGST.

The states, especially the NDA-ruled one, had raisedobjections on the proposal on the plea that it would give vetopower to Union Finance Minister over states taxation issues.

The Centre provided another draft to states, suggestingthat changes in GST could be made only if there was consensuson those issues in the council. However, some state financeministers did not agree to even this suggestion.

After missing the original April 2010 deadline for GSTrollout, the government proposed to introduce it in April2011. But it is all set to miss this deadline too.

The GST will subsume indirect taxes such as excise dutyand service tax at the central level and VAT on the statesfront, besides local levies.

On the Central Sales Tax compensation issue, however, thestates were almost united.

Yesterday, the Union Cabinet approved Rs 7,029 crorecompensation to states for the losses they suffered due toreduction in central sales tax (CST) rate in 2010-11.

CST, a tax on movement of goods from one state toanother, was reduced from 4 per cent to 3 per cent in 2007-08and further to 2 per cent in 2008-09 after the introduction ofVAT, as it was considered distortionary.

Yadav called the compensation too little and said thatmost of the states were surprised by the package.

"The CST compensation is too little. Instead of Rs 16,000crore, they have given Rs 7,000 crore." PTI BSP RAM